Oct 20th, 2008 // Comment

Since, despite the events of recent weeks, I don’t understand how finance works, I don’t really know what’s going on in this artlcle about Warner Music Group head Edgar Bronfman’s questionable business decisions, except that he lost $4 billion with Vivendi Universal. (Also, he probably shouldn’t have rejected EMI’s takeover bid, since they were offering $31/share and the highest point WMG’s share prices have ever reached is $23.) But the line about cutting costs does remind me of a good story. When Bronfman took over, he brought in some new people to do the firing, and though it’s never easy to fire people, there were some no-brainers. The one in particular was a janitor who had been at the company for decades. Since Warner’s pay system was based on seniority, and the janitor had kept getting regular raises for thirty-some years, he made $125,000 a year. I hope he invested it well. [Portfolio via TDS]

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